Customers could "vote with their feet" and refuse to book flights with British Airways if it presses ahead with plans to cut jobs and pay, the Government says.
Transport Minister Transport Minister Kelly Tolhurst issued the warning as North East MPs condemned the airline's plans to make up to 12,000 employees redundant, including many working at a Newcastle call centre.
Newcastle Central MP Chi Onwurah told the House of Commons: "My constituents have had to make huge sacrifices during this terrible outbreak, and they have responded with real solidarity, helping others and following the rules. Now those who work at the British Airways call centre in Newcastle see the contempt in which they are held, and they feel abandoned, betrayed and blackmailed."
Transport Minister Kelly Tolhurst told her: "Businesses are judged by the way they behave and the way they treat their employees. We will need to wait to see how British Airways is judged by the consumers and customers they reach out to, and I will do whatever I can to work with the airlines to mitigate any job losses."
And the Minister said: "The organisations taking these decisions ultimately need customers, and if customers view that their actions are below par, people might start voting with their feet when booking flights."
Blaydon MP Liz Twist also condemned British Airways, saying: "My many constituents who are employed by British Airways are absolutely devastated by the threat of losing their jobs and the proposed downgrading of their terms and conditions of employment."
Ms Tolhurst suggested that British Airways' decision was not in the spirit of the Government's furlough scheme, which it has benefitted from and was designed to save jobs while the lockdown continues.
She said: "We need to recognise that coronavirus has had an unprecedented impact on all businesses, and that airlines are not immune from some of the financial challenges faced by other parts of the economy. However, we absolutely stand by the point that this was not the intention of the job retention scheme."
BA announced in April that it plans to reduce its workforce by more than a quarter as it does not expect demand for air travel to return to 2019 levels before 2023.
It had already furloughed around 23,000 staff under the Government’s Job Retention Scheme, which pays 80% of wages up to £2,500 a month.
Unite general secretary Len McCluskey has accused BA of using the Covid-19 crisis "as cover to impose a long-term plan to slash jobs, pay and conditions including its workers in call centres. "
In a letter to Prime Minister Boris Johnson, Willie Walsh, CEO of parent company International Airline Group (IAG), said the industry is facing "the worst downturn ever seen in its history" with flights grinding to a halt worldwide.
He said BA had operated 1,784 flights in April 2020 as opposed to 28,486 at the same time last year, a drop of almost 94%, and does not see business returning to 2019 levels until 2023/24.